Friday, April 1, 2005 | 11:31 a.m.
CARSON CITY -- After hours of backroom bargaining, the Legislature struck a deal Thursday night to give tax relief to property owners in the state.
The final plan remained largely the same as previous incarnations, despite some political squabbles. The Legislature was expected to give its final approval to the plan today. Gov. Kenny Guinn said he would sign the bill.
The maximum increase for homeowners' property tax bills would be limited to 3 percent for their homes and the increases for all other tax bills on properties in Clark County would be capped at 8 percent.
The differences came as legislators worked out provisions to ease taxes for renters, small businesses and development in rural counties. They also disagreed on whether the plan gave too much relief to big businesses such as Strip casinos and land speculators.
While agreeing on a compromise bill, legislators decided to make it easier for small businesses to ask for property tax relief when they are experiencing revenue downturns.
And they used a charitable provision in the state constitution to work in a 3 percent cap on tax bill increases for low-income apartments.
Without those provisions, the tax relief plan would have favored big businesses, Assembly Majority Leader Barbara Buckley, D-Las Vegas, said.
"There was a lot of concern in the Assembly that too many breaks were being given to the big guy, to the out-of-state speculators," Buckley said. "What the Assembly was most concerned about was leveling the playing field to make sure the small businesses and renters were being given the same level of relief."
Buckley was part of the conference committee that reached a consensus on the plan by 8:15 p.m. Thursday. The other members of the committee were Sens. Mike McGinness, R-Fallon, Randolph J. Townsend, R-Reno, and John Lee, D-North Las Vegas, along with Assemblywoman Chris Giunchigliani, D-Las Vegas, and Assembly Minority Leader Lynn Hettrick, R-Gardnerville.
Guinn complimented the Legislature for deciding the plan in time to give property owners tax relief this year.
"The plan isn't perfect, but I'm certain future legislatures will continue to adust this plan so that it is both fair to taxpayers while providing enough revenue to fund our school districts and not hinder essential state services," Guinn said.
The bill includes a committee study of property taxes between legislative sessions. The committee will look at potential long-term solutions.
The deal seemed tenuous at times Thursday, as Assembly members complained that the Senate amended too many portions of Assembly Bill 489, which members of both houses had crafted and called a compromise.
First, the Senate changed the bill Thursday morning to set a flat 8 percent cap on all properties that are not owner-occupied homes.
When voting on Thursday morning, Sen. Maggie Carlton, D-Las Vegas, said she thought the 8 percent cap on commercial properties gave the most breaks to Strip resorts.
"I don't think this protects small businesses," Carlton said. "I think it protects big businesses."
She said businesses already have a mechanism to ask for hardship waivers on property taxes.
The amendment's sponsor, Sen. Warren Hardy, R-Las Vegas, said he wanted to protect big businesses as well as small businesses.
"I don't know why we decided to declare war on our state's biggest industry," Hardy said. "I stand here as a proud protector of the gaming businesses and their ability to provide jobs to a large portion of our citizens."
Then, on Thursday afternoon, senators took it a step further, saying that the properties would be capped at either 8 percent or the 10-year average growth rate in each county, whichever is less.
Clark County will likely keep its 8 percent cap for the foreseeable future. Its average growth rate this year was about 13 percent.
Rural counties will likely use their 10-year average growth rates, since they are usually less than 8 percent. Or, in counties that have seen extreme devaluations of property, the state would set a cap at twice the level of the consumer price index.
The biggest question Thursday was whether members of the Assembly would work to raise the 8 percent cap on commercial properties.
Some Assembly members complained that the 8 percent cap would give businesses a break while dealing a bigger hit to local governments. They suggested a 9 percent cap instead.
But Townsend pointed out that the Senate almost passed an amendment Thursday that would have lowered taxes even more, giving homeowners a freeze on taxes this year instead of a 3 percent cap.
The amendment, pushed by Senate Minority Leader Dina Titus, D-Las Vegas, lost by one vote, with 10 senators supporting it and 11 opposing it.
"That's a pretty narrow loss," Townsend said. "It might give you some indication on how bipartisan the Senate felt. It was very close.
"That kind of splits our house ... so it would be, I believe, very difficult to come back with an increase without some serious concerns by those who wanted to go lower."
Ultimately, the compromise committee decided against attempting to raise the cap, and Buckley said she the nods to small businesses and renters were enough to appease her.
With a plan mostly resolved, the Legislature met its self-imposed deadline to find a solution to rising property taxes by the end of March. They could make minor changes to the bill, but taxpayers should see the plan reflected in bills mailed out in July.
But what lies ahead could be even more controversial. Business interests complained that the plan effectively created a split roll, taxing businesses differently than homeowners.
Several business representatives said they would fight any constitutional amendment that would continue to treat businesses differently than residences.
But, for now, Sam McMullen, a lobbyist for major business groups, said he is glad the Legislature carved out amendments that eased taxes for businesses and gave them a set cap.
"You've got to give them all credit," he said.
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